V-BID Changes Insurance Framework for Specialty Medications

With specialty pharmaceuticals carrying extremely high-and rising-costs, nonadherence and discontinuation of therapy is becoming even more commonplace. The value-based insurance design (V-BID) model, so termed by A. Mark Fendrick, MD, Dean Smith, PhD, and Michael Chernew, MD, promotes personalized patient care by easing access to specialty medications while reducing the number of prescribed treatments of lesser value as a replacement.

Published Online: June 06, 2014

Cate Douglass

With specialty pharmaceuticals carrying extremely high—and rising—costs, nonadherence and discontinuation of therapy is becoming even more commonplace. The value-based insurance design (V-BID) model, so termed by A. Mark Fendrick, MD, Dean Smith, PhD, and Michael Chernew, MD, promotes personalized patient care by easing access to specialty medications while reducing the number of prescribed treatments of lesser value as a replacement.

Dr Fendrick, Jason Buxbaum, MHSA, and Kimberly Westrich, MA, published a white paper, Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design, that discussed the role that V-BID can play in reducing costs of specialty medications and discouraging nonadherence.

According to the authors, these medications, most notably those that help to treat rheumatoid arthritis (RA), multiple sclerosis (MS), and cancer, generally fall on the fourth and fifth tiers of most medical insurance plans, resulting in high out-of-pocket costs for patients.

Following a co-insurance–based plan, patients pay on average about 30% of the medication cost. They are also likely to pay as high as 50% of the total cost, which is not included in the additional costs patients incur in the lump sum of visits and other required tests.

The rising cost for specialty medications remains at the forefront of healthcare reform, which is what value-based insurance intends to tackle. In its design, the V-BID model assures that cost-sharing is directly related to a drug’s clinical value and specific patient characteristics rather than acquisition cost of the drug. In doing so, the V-BID implementations guarantee that patients are receiving the medications and therapies they need without burning a bigger hole in their wallets.

The authors propose a number of options for applying the V-BID model to specialty medications. Their first suggestion would be for plans to “impose no more than modest cost-sharing on high-value medications”—which entails eliminating the various tiers in an insurance plan and creating access to all necessary medical treatments. They add that “such an approach limits possibilities for clinically nuanced differentiation among treatments within the tiers, but promotes access to all potentially important medications.”

Additionally, “To ensure good value for healthcare spending, it is essential that therapies are available to those who will benefit from them. It is less critical that therapies are easily accessible to those who are unlikely to benefit,” said the authors. By correlating the patient’s disease-specific characteristics to the types of therapies and medications that he or she may need, V-BID ensures that the patient receives high-value treatment at a lower cost.

The V-BID model also promotes reduced cost-sharing when transferring medications that did not produce the intended results for the patients—referred to as the “reward the good soldier” strategy—which encourages more patients to seek high-value providers for their care.

While implementing V-BID will cause predictable challenges, including added administrative complexities and implementation of patient incentives, the results have thus far been positive.
“Most studies have reported improvements in adherence and health outcomes without statistically significant increases in total spending. V-BID interventions that carefully target patients are particularly promising,” wrote the authors.

High cost-sharing drives many patients to noninitiation of and nonadherence to needed therapies, which are 2 of the most prominent factors that increase morbidity and mortality in serious diseases. The authors noted that, “On average, investigators have found that adherence improves among the targeted population by 3% in 1 year, though some studies have reported improvements of 9% or more.” However, initiation and adherence could be increased more with the right tools and incentives, which V-BID can offer.

“The ultimate test of healthcare transformation will be whether it improves health and addresses rising costs,” the authors explained. “Tools like V-BID, that change the focus from how much to how well we spend our healthcare dollars, will better enable the achievement of these goals.”